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Case Number

CRP No. 6577 of 2004

Advocates

For the Appellant: D. Raghava Reddy, Advocate.
For the Respondent: R6, M. Narender Reddy, Advocate.

Judges

P.S Narayana, J.

Acts

Order 5 Rules 9 to 13 and 15 to 30; Order 9; Order 13, Rules 3 to 10; Order 16, Rules 2 to 21; Order 17 and Order 28, Rules 1
Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973. (3)
Andhra Pradesh Motor Vehicles Rules, 1989. Rule 473 of the said Rules
Order-I Rule 10 of the Code of Civil Procedure (hereinafter referred
provisions of the Indian Limitation Act, 1877 (15 of 1877) Section 22,
SECTION 166 MOTOR VEHICLES ACT 1988
Order 1 Rule 10 of the Code of Civil Procedure
Act, 1972 (Act No. 26 of 1972) (for short 'the Act').
Act. 7. Section 169 of the M.V. Act
provisions of law. Section 169
Section 110-C (now Section 169),
Sub-section (1) of Section 165
Sub-section (6) of Section 158
Order-1 Rule 10 of the Code
Section 166 of the M.V. Act
MOTOR VEHICLES ACT

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This opinion arises from a revision petition challenging an order dismissing an interlocutory application that sought to implead the State Bank of India (S.B.I.) as a party respondent in M.V.O.P. No. 377 of 2002 before the Motor Vehicle Accident Claims Tribunal-cum-Principal District Judge, Kadapa.

The application to implead the S.B.I. was made under Order 1 Rule 10 of the Code of Civil Procedure. The revision petitioner (the 1st respondent in the revision) contended that the S.B.I. had advanced loans under a hire-purchase agreement for purchase of the offending motor vehicle and that, by virtue of that hire-purchase agreement/hypothecation, ownership of the vehicle continued with the S.B.I., making it a necessary party to the compensation claim under Section 166 of the Motor Vehicles Act, 1988.

The Claims Tribunal (learned Judge) dismissed the impleading application. The revision petition challenges that order. The court heard counsel for the revision petitioner and counsel for the S.B.I. before delivering the present judgment.

Legal Issues Presented

Whether the State Bank of India, having advanced a loan by way of hypothecation or under a hire-purchase arrangement, is to be regarded as the "owner" of the motor vehicle for the purposes of a compensation claim under Section 166 of the Motor Vehicles Act, 1988, and therefore a necessary party to such claim.
Whether Order 1 Rule 10 of the Code of Civil Procedure is applicable to proceedings before the Claims Tribunal under the Motor Vehicles Act and, if so, whether it permits impleading the bank in the present circumstances.

Arguments of the Parties

Revision Petitioner's Arguments (as presented by Mr. D. Raghava Reddy)

The application under Order 1 Rule 10 CPC sought impleading S.B.I. on the ground that the revision petitioner had secured loans from S.B.I. for purchasing the vehicle under a "hire purchase agreement".
Because of that hire-purchase agreement, ownership of the vehicle continued with S.B.I., making the bank a necessary party to the compensation claim under Section 166 of the Motor Vehicles Act.
Reliance was placed on the definition of "hire-purchase agreement" contained in the Hire-Purchase Act, 1972.

State Bank of India's Arguments (as presented by Mr. Narender Reddy)

Advancing a loan for purchase of a motor vehicle and hypothecating the vehicle does not make the bank the "owner" of the vehicle for purposes of the Motor Vehicles Act; therefore, the bank cannot be fastened with liability for payment of compensation under that Act.
S.B.I. is not a necessary party to the compensation claim and the impleading application was rightly dismissed by the learned Judge, who recorded reasons at paragraph 3 of the impugned order.
If any civil liability arises under the hire-purchase agreement between the bank and the purchaser, such claims are to be pursued in a civil suit, not in the original petition before the Claims Tribunal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Kishan Reddy v. K. Ramulamma	Support for the proposition that the Claims Tribunal, by virtue of Section 169 of the Motor Vehicles Act and applicable rules, may adopt procedures from the Code of Civil Procedure (including Order 1 Rule 10) as it thinks fit; the Tribunal has broad powers to evolve its own procedure.	The court relied on this decision to confirm that Order 1 Rule 10 is, in principle, applicable to proceedings before the Claims Tribunal and that the Tribunal can adopt such CPC provisions in dealing with claim applications.
P. Sujathamma v. G.M. Siva Prasad	Expressed a similar view as to the applicability of Order 1 Rule 10 to claims under the Motor Vehicles Act; earlier decisions relied on the definition of "hire-purchase agreement".	The court noted the case as reflecting similar views but observed that reliance on the Hire-Purchase Act's definition is of limited consequence given that the Hire-Purchase Act, 1972 had not come into force.
Annamma v. Accident Claims Tribunal	Also took a view aligning with applicability of Order 1 Rule 10 to claims under the Motor Vehicles Act and gave weight to the hire-purchase definition in argument.	The court recorded this case alongside P. Sujathamma but stated that the Hire-Purchase Act had not come into force, and therefore reliance on its definition "deserves no serious consideration" for present purposes.

Court's Reasoning and Analysis

The court's analysis proceeded along the following lines, based entirely on the reasoning expressed in the opinion:

Applicability of Order 1 Rule 10 CPC: The court accepted the settled position — drawing on Kishan Reddy v. K. Ramulamma and the statutory provisions (Section 169 of the M.V. Act and Rule 473 of the Andhra Pradesh Motor Vehicles Rules, 1989) — that a Claims Tribunal has broad procedural powers and may, in appropriate cases, adopt provisions of the Code of Civil Procedure, including Order 1 Rule 10. The court therefore treated applicability of Order 1 Rule 10 as not in doubt.
Hire-Purchase Act and its definition: The revision petitioner relied on the definition of "hire-purchase agreement" in the Hire-Purchase Act, 1972. The court reviewed the legislative history noted in the opinion and observed that although the Hire-Purchase Act was enacted, the notifications bringing it into force were rescinded and, as stated in the opinion, "The Act did not come into force till date." Consequently, the court concluded that reliance on the definition from that Act "deserves no serious consideration" for deciding the present matter.
Substance of the ownership argument: The court examined the factual and legal thrust of the revision petitioner’s contention and rejected it. The court reasoned that S.B.I. had only advanced a loan for purchase and held the vehicle under hypothecation, entitling it to realize the amount due. That, however, was, in the court's view, a limited right to enforce its security and did not make the bank the "owner" of the vehicle for purposes of the Motor Vehicles Act.
Appropriate forum for bank's liabilities (if any): The court observed that if the hire-purchase agreement or contract between the purchaser and the bank imposed any civil liability upon the bank, such civil claims lie in a civil suit and cannot be raised as part of the original claim petition before the Claims Tribunal, whose jurisdiction and scope are limited to adjudication of motor-vehicle compensation claims.
Assessment of the learned Judge's order: The learned Judge had recorded reasons (quoted in the opinion) explaining that possession of the vehicle under hire-purchase by the petitioner makes it difficult to regard the bank as owner and that any civil liability against the bank should be pursued in a civil suit. The revisional court found no jurisdictional error in those reasons and concluded there was no ground to interfere.

Holding and Implications

Holding: The revision petition is DISMISSED. The court held that the State Bank of India is not a necessary party to the present compensation claim and affirmed the order of the learned Judge dismissing the impleading application.

Implications:

Direct effect on the parties: The S.B.I. will not be impleaded in M.V.O.P. No. 377 of 2002; the compensation proceedings will continue without the bank as a party. Any civil claim against the bank arising out of hire-purchase or loan arrangements should be pursued in an appropriate civil forum.
Broader precedent or doctrine: The court reiterated that Order 1 Rule 10 CPC may be applicable to Claims Tribunal proceedings in appropriate circumstances (drawing support from Kishan Reddy), but in the facts of this case the bank's status as a secured creditor by hypothecation did not make it the "owner" for the purposes of the Motor Vehicles Act. The opinion states no new legal principle beyond its application to the facts at hand; the court expressly found no error in the impugned order and did not purport to lay down a broader or novel rule.

No costs were awarded. The revision petition was found to be devoid of merit and dismissed.

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Varapana Seetharami Reddy v. Guvvala Sekharamma And Others

1. Heard Mr. D. Raghava Reddy, learned counsel representing the revision petitioner-1st respondent - and Mr. Narender Reddy, learned counsel representing the State Bank of India.

2. Mr. Raghava Reddy, learned counsel would contend that the application was moved by the revision petitioner, the 1st respondent in M.V.O.P. No. 377 of 2002 on the file of learned Motor Vehicle Accident Claims Tribunal-cum-Principal District Judge, Kadapa, under Order-I Rule 10 of the Code of Civil Procedure (hereinafter referred to as 'Code') for impleading the State Bank of India, Chinnamandem Branch (hereinafter referred to as 'S.B.I.'), as party respondent, on the ground that the revision petitioner secured loans from the S.B.I. for purchasing the motor vehicle in question under 'hire purchase agreement' and hence the ownership of the vehicle continues with the S.B.I. by virtue of the said 'hire purchase agreement'. Learned counsel had drawn the attention of this Court to the definition of 'hire purchase agreement' under the provisions of The Hire-Purchase Act, 1972 (Act No. 26 of 1972) (for short 'the Act').

3. Per contra, Mr. Narender Reddy, learned counsel would maintain that merely because the loan was advanced for purchase of motor vehicle, which is under hypothecation, it cannot be said that the S.B.I. is the owner of the motor vehicle in question and hence the liability relating to the payment of compensation cannot be fastened as against the State Bank of India. The learned counsel would maintain that in view of the same S.B.I. cannot be said to be a necessary party to compensation claim. Learned counsel also had taken this Court through the reasons recorded at paragraph No. 3 of the impugned order and would submit that the view expressed by the learned judge is the correct view in the facts and circumstances of the case and the said order needs no disturbance at the hands of this revisional Court since there is no jurisdictional error committed by the learned Judge in making the said Order.

4. Heard both the learned counsel.

5. The revision petition is preferred as against the order dismissing an application filed to implead the S.B.I. as a party respondent in M.V.O.P. No. 377 of 2002 on the ground that the S.B.I. is the real owner of the motor vehicle in question and hence in a compensation claim filed under Section 166 of the Motor Vehicles Act, 1988 (for short the 'M.V. Act'), such party would be a necessary party. The same was opposed and the application was ultimately dismissed by the learned Judge observing at paragraph No. 3 as under:

"Merely because the owner of the offending vehicle had obtained loan from the bank and hypothecated the same with the bank, the bank cannot be equated with the owner of the vehicle within the meaning of Motor Vehicles Act for the purpose of paying compensation to the legal representatives of the deceased who died in the motor vehicle accident. It is not the Bank, but the petitioner herein that is in possession of the vehicle under the hire-purchase agreement. When the petitioner in this interlocutory application himself is in possession of the vehicle under the hire-purchase agreement, he is unable to show as to how the bank could be said to be owner of the vehicle. If under hire-purchase agreement between the Bank and the petitioner any civil liability is cast on the bank, such claim against the bank can be put forth in a civil suit, but not in this original petition before this Tribunal whose jurisdiction is limited."

6. Section 166 of the M.V. Act reads as under:

"166. Application for compensation.-

(1) An application for compensation arising out of an accident of the nature specified in Sub-section (1) of Section 165 may be made,-

(a) by the person who has sustained the injury; or

(b) by the owner of the property; or

(d) by any agent duly authorized by the person, injured or all or any of the legal representatives of the deceased, as the case may be:

Provided that where all the legal representatives of the deceased have not joined in any such application for compensation the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application.

(2) Every application under Sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident...occurred or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed:

Provided that where no claim for compensation under Section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant.

(3) xx xx xx (Omitted by ibid) (4) The Claims Tribunal shall treat any report of accidents forwarded to it under Sub-section (6) of Section 158 as an application for compensation under this Act.

7. Section 169 of the M.V. Act reads as under:

169. Procedure and powers of Claims Tribunals:

(1) In holding any inquiry under Section 168, the Claims Tribunal may, subject to any rules that may be made in this behalf, follow such summary procedure as it thinks fit.

(2) The Claims Tribunal shall have all the powers of a Civil Court for the purpose of taking evidence on oath and of enforcing the attendance of witnesses and of compelling the discovery and production of documents and material objects and for such other purposes as may be prescribed;

And the Claims Tribunal shall be deemed to be a Civil Court for all the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

(3) Subject to any rules that may be made in this behalf, the claims Tribunal may, for the purpose of adjudicating upon any claim for compensation, choose one or more persons possessing special knowledge of and matter relevant to the inquiry to assist it in holding the inquiry.

8. In Kishan Reddy v. K. Ramulamma1 a learned Single Judge of this Court at paragraph No. 6 held as under:

"In exercise of the powers conferred under the Act the Governor of Andhra Pradesh has framed the Andhra Pradesh Motor Vehicles Rules, 1989. Rule 473 of the said Rules provides that Order 5 Rules 9 to 13 and 15 to 30; Order 9; Order 13, Rules 3 to 10; Order 16, Rules 2 to 21; Order 17 and Order 28, Rules 1 to 3, shall, so far as may be, apply to the proceedings before the Claims Tribunal. It is true that neither Section 169 of the Act nor Rule 473 of the Rules specifically makes Order 1 Rule 10 of the Code of Civil Procedure applicable to the proceedings before the Claims Tribunal initiated under the Motor Vehicles Act. But, on that count it cannot be said that the application made by the Claimants under Order 1 Rule 10 of the Code of Civil Procedure to implead the revision petitioner as Respondent No. 3 in the main O.P. is not maintainable in law. At this stage, it is relevant to note the significant phrase i.e., "follow such summary procedure as it thinks fit" occurring in Sub-section (1) of Section 169 of the Act. In the absence of any restraining provision, the Claims Tribunal is at liberty to follow any procedure that it may choose to evolve for itself so long as it is consistent with the rules of natural justice and does not contravene the provisions of law. Section 169 expressly empowers the Claims Tribunal to formulate its own procedure. Since the Claims Tribunal has all the powers of a Civil Court, it may choose to follow the procedure laid down in the Code of Civil Procedure. In holding an inquiry under Section 168 of the Act, the Claims Tribunal is empowered to follow such summary procedure as it thinks fit. The intention is that the enquiry should not take the shape of an elaborate and longdrawn proceedings of a regular civil suit, but should be concluded as much speedily as possible. The nature of the inquiry should be more or less like a judicial enquiry. There can be no gainsaying that vast power exists in the Claims Tribunal to determine its own procedure in dealing with claim applications. The Claims Tribunal has all the trappings of a Court and the proceedings before it closely resemble to the proceedings in a Civil Court. Moreover, it is quite clear that the legislature purposely did not make all the provisions of the Code of Civil Procedure applicable to the proceedings before the Claims Tribunal, which are of a summary nature, as the whole intention of the legislature is to ensure a speedy disposal of the claim applications filed by the injured persons or the legal representatives of the deceased. Under Section 110-C (now Section 169), the Claims Tribunal is empowered to evolve its own procedure and for the purpose of dealing with a claim application it can resort to any provisions of the Code of Civil Procedure on the principles of justice, equity and good conscience. There is no bar to adopt the procedure provided under Order-1 Rule 10 of the Code of the Civil Procedure."

9. There cannot be any doubt or controversy relating to the applicability of Order 1 Rule 10 of the Code and the said provision says:

Suit in the name of wrong plaintiff.

10.(1) Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the suit, if satisfied that the suit has been instituted through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as the Court thinks just.

Court may strike out or add parties-

(2) The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party properly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.

(3) No person shall be added as a plaintiff suing without a next friend or as the next friend of a plaintiff under any disability without his consent. Where defendant added, plaint to be amended.

(4) Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copies of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant.

(5) Subject to the provisions of the Indian Limitation Act, 1877 (15 of 1877) Section 22, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons.

10. Similar view had been expressed relating to applicability of Order 1 Rule 10 of the Code to claims under the M.V. Act in P. Sujathamma v. G.M. Siva Prasad and Annamma v. Accident Claims Tribunal3. Strong reliance was placed on the definition of 'hire-purchase agreement' under Section 2 of the Act. The Hire Purchase Act, 1972 came into force on 1st June, 1973 vide GSR 222 (E) dated 30th April, 1973, but the notification was rescinded by GSR 288 (E) dated 31st May, 1973 and the Act was made effective from 01-09-1973 but this notification was also rescinded by GSR 402 (E) dated 30th August, 1973. The Act did not come into force till date. However, the definition was relied upon and this aspect deserves no serious consideration in view of the fact that the said Act did not come into force as on this date.

11. Apart from this aspect of the matter, even if the views expressed by the Apex Court and different High Courts relating to the 'Hire-Purchase Agreement', if carefully scrutinized, the stand taken by the revision petitioner cannot be accepted. The S.B.I. just advanced the loan for the purpose of purchase of the motor vehicle. The motor vehicle is, no doubt, under the hypothecation of the S.B.I. and hence S.B.I. is entitled to realise the amount. When that being the limited purpose, it cannot be said that merely because the S.B.I. had advanced the loan, it would be deemed to be the owner for the purposes of the M.V. Act referred to supra and to contend that such party is a necessary party to be brought on record in a compensation claim is an argument, which cannot be definitely accepted.

12. Hence this court is of the considered opinion that the S.B.I. is not a necessary party to the present compensation claim. Learned Judge recorded reasons and ultimately dismissed the application.

13. This Court does not find any reason to interfere with the impugned order. The revision petition is devoid of merit and accordingly the same shall stand dismissed. No costs.

Varapana Seetharami Reddy v. Guvvala Sekharamma And Others

Structured Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Revision Petitioner's Arguments (as presented by Mr. D. Raghava Reddy)

State Bank of India's Arguments (as presented by Mr. Narender Reddy)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Varapana Seetharami Reddy v. Guvvala Sekharamma And Others

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